1. iNetworks Group Inc.

David Smat founded iNetworks with $250,000 from a 401(k) account at his former employer, AT&T Inc. Photo: Erik Unger

Location: Chicago

2009 revenue: $21.6 million

Five-year growth: 5,569%

Profitable? Yes

Local employees: 14

Worldwide employees: 24

What is does: Telecom service reseller

How it grew: In any downturn, contracts with deep-pocketed government agencies bring immense comfort.

Founded in the aftermath of Sept. 11, iNetworks Group has jumped to the top of the Fast Fifty list of growing companies by having faith in its narrow focus. The company is a reseller and integrator of communications networks, with 85% of its work for the U.S. government  almost all of that with the Department of Defense.

INetworks generated more than $21 million in revenue last year  up from $380,000 in 2004  with 14 employees at its Chicago headquarters and a branch office in suburban Washington, D.C. The company, like most phone-line resellers, is asset-light, meaning it doesn't own any of the cables and switches it arranges for its clients to employ.

President and CEO David Smat founded the company with $250,000 drained from a 401(k) at his former employer, AT&T Inc. He decided early on to focus on government agencies with high-bandwidth requirements for both voice and data transport. He also decided to bypass both the wireless market and state government, the latter deemed a credit risk.

With a big Rolodex of connections with regional and local carriers, as well as AT&T and the other national companies, Mr. Smat and his brokers earn their commission by finding the government the cheapest and most reliable connections between any two points in the country. "Our strength is our proprietary knowledge about where carriers' facilities are located," he says.

To keep growing, Mr. Smat may be ready to widen iNetworks' customer base to include private-sector companies in health care and financial services  markets he's avoided in the past. He might also begin to invest in his own hardware to fill gaps in carriers' networks. But the dominant focus will remain on the federal government: "I have yet to see the federal government spend less money one year than the year before. I'm counting on that to continue for the next 20 years."

Craig Clausen, executive vice-president of telecom consultancy New Paradigm Resources Group Inc. in Chicago, predicts that iNetworks eventually will have to invest in transmission assets of its own.

"They won't actually have to deploy fiber, but they'll probably have to invest in things like high-level data switches giving them better control over their clients' traffic," he says.